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Pharmaceuticals in Reverse Supply Chain Now Hazardous Waste

EPA final rules on pharmaceutical returns impose heavy burdens on healthcare providers and distributors.

A new rule finalized by the Environmental Protection Agency (EPA) requires that prescription pharmaceuticals sent from healthcare facilities to reverse distributors must be regulated as solid waste and evaluated for hazardous classification at the healthcare facility before they are shipped.

First proposed four years ago, the final rule was signed in December 2018 by EPA Acting Administrator Andrew Wheeler and is expected to become effective in June. “This rule will impose significant new obligations on healthcare providers, including pharmacies and long-term care providers, as well as forward and reverse distributors of pharmaceuticals,” state attorneys for the law firm of Foley & Lardner.

In the 1980s and 1990s, EPA’s position in policy memoranda was that pharmaceuticals in the reverse distribution chain were “not considered wastes until a determination has been made to discard them.” That approach worked well for healthcare providers, who frequently relied on reverse distributors to determine whether their unused prescription and over-the-counter medications could be credited/reused/reclaimed or should be discarded, the lawyers note.

The EPA during the administration of President George W. Bush proposed classifying returned pharmaceuticals as “universal waste” entitled to relaxed management standards, but never finalized that rulemaking after concerns were raised regarding the potential diversion of narcotics and other medications regulated by the Drug Enforcement Agency (DEA).

The Obama Administration proposed the current rule in September 2015, offering an entirely new set of management standards for unused pharmaceuticals. In the subsequent three years, industry representatives, EPA and the White House Office of Management and Budget held discussions about how far such a rule should go.

It sounds like someone gave the impression of being entirely too comfortable with the status quo. In the December publication of the final rule, EPA noted its concern that many industry participants have come to disregard the intent behind the agency’s prior guidance, and erroneously believed that it was a blanket statement that no pharmaceuticals going through reverse distribution were considered solid waste.

The upshot is that the final rule now treats prescription pharmaceuticals—but not non-prescription drugs—as having been “discarded” by a pharmacy, hospital, or other healthcare provider when it decides to ship the material to a reverse distributor. Upon being “discarded,” those pharmaceuticals become solid waste, triggering management obligations under the Resource Conservation and Restoration Act (RCRA).

This applies to pharmaceuticals that are characteristically toxic, or that meet the definition of certain “listed” wastes, such as P and U listed acutely hazardous substances. Chemicals on the P list are considered acute hazardous wastes and those on the U list are identified as toxic wastes. Some chemicals on both lists may also be designated to have other properties.

Industry-Specific Requirements

To accommodate the unique market arrangements for pharmaceuticals, EPA’s final rule establishes an industry-specific set of requirements for prescription pharmaceuticals under RCRA, the Foley & Lardner attorneys point out.

When it comes to non-prescription pharmaceuticals, EPA took a different approach and will continue to allow healthcare providers to ship potentially reusable and reclaimable over-the-counter drugs and dietary supplements as recyclable materials outside the RCRA waste regime to reverse distributors, where the actual decision to reuse/reclaim or discard the material will be made.

The pharmaceutical waste management standards establish requirements for healthcare facilities (a term broadly defined to include hospitals, clinics, pharmacies and long-term care facilities) as well as third-party logistics providers. Healthcare facilities that dispose of prescription drugs must register with EPA. They also are required to separate listed or characteristically hazardous (toxic, flammable, reactive, or corrosive) pharmaceuticals from unlisted, non-hazardous pharmaceuticals.

“Healthcare facilities will need to adopt training programs for staff to comply with the rule, and will need to dispose of hazardous pharmaceuticals within one year of their being determined to be a waste,” the attorneys stress.

The rule also creates an exemption from certain existing requirements for containers of medications that would be considered acutely hazardous when made a waste, such as Coumadin, so that facilities no longer have to tally the weight of Coumadin packaging and consider it acutely hazardous waste.

For reverse logistics providers changes from the earlier proposal include authorization to accumulate hazardous waste pharmaceuticals for up to 180 days, rather than 90 days as proposed; an exemption for managing materials subject to recall or a litigation hold; and authorization to complete the initial sorting process within 30 days, rather than the 21 days proposed.

The Foley & Lardner attorneys add that the final rule includes four other significant elements. It bans the practice of flushing hazardous waste medications down the toilet (“sewering”). The rule exempts Food and Drug Administration-approved nicotine replacement therapies, such as patches and gum, from hazardous waste disposal requirements.

The rule also exempts medications collected during drug take-back programs and events, placing them within the Congressionally-created household hazardous waste exemption. In addition, it eliminates the dual regulation of hazardous waste pharmaceuticals under RCRA if they are also regulated by the DEA as controlled substances.

“The final rule fundamentally changes EPA’s long-held position on the point at which a pharmaceutical product is considered a solid waste under RCRA,” according to the attorneys. “That change will create significant regulatory uncertainty and potential liability for entities in the pharmaceutical distribution chain that suddenly find themselves evaluating compliance with the new rule.”

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